Jack Dorsey’s Block (formerly known as Square) is officially entering the Bitcoin mining space. Last October Dorsey teased via a series of tweets that Block was considering building a Bitcoin mining system that is “based on custom silicon and open source for individuals and businesses worldwide.”
On Thursday we found out that Block will move forward with this plan. Thomas Templeton, Block’s general manager for hardware, provided details about their plans to begin mining bitcoin.
When Dorsey first floated the idea of building a bitcoin mining system last October, he outlined several principles he believed needed to be considered, including: network distribution, energy efficiency, silicon production, vertical integration of the supply chain, and accessibility to easy-to-use and reliable equipment.
Templeton touched on a few of these ideas on Thursday. Regarding energy efficiency and network distribution, he offered very few details, but did say that they “want to make mining more distributed and efficient in every way, from buying, to set up, to maintenance, to mining.” Templeton also laid out several “pain points” and “technical challenges” related to current bitcoin mining systems, including availability, reliability, and performance.
Demand for bitcoin mining ASICs is high and supply can often be disrupted by silicon chip shortages, increasing the price of the ASICs. Deliveries can often be unpredictable, particularly for individual home miners. Even after a rig is acquired and set up, overheating and dirt/dust can cause the miner to shut down. According to Templeton, current mining rigs “become non-functional almost every day, which requires a time-consuming reboot.” Finally, regarding performance, Templeton points out that some miners cause unwanted harmonics in power grids and are too loud for home use. These are just a few of the problems that Block’s team has identified with current systems.
As far as addressing these problems, Templeton tweeted that developing new products “is never a solo journey, and evaluating existing tech is always part of our practice. For this project, we started with evaluating various IP blocks (since we’re open to making a new ASIC), open-source miner firmware, and other system software offerings.” Templeton also provided some insight into the team that Block is building for this venture: “We’re incubating this investigation within Block’s hardware team and are starting to build out a core engineering team of system, asic, and software designers led by Afshin Rezayee.”
Although Block appears to be in the preliminary phases of their foray into mining, they’re appear to be identifying key problems associated with current mining systems and putting together a solid team. These are important first steps to bringing a product to the market that solves existing issues.